Comments on: The Limits of Economics http://baselinescenario.com/2009/07/09/the-limits-of-economics/ What happened to the global economy and what we can do about it Sat, 21 Nov 2009 02:32:50 +0000 http://wordpress.com/ hourly 1 By: Ken http://baselinescenario.com/2009/07/09/the-limits-of-economics/#comment-19686 Ken Fri, 10 Jul 2009 22:17:15 +0000 http://baselinescenario.com/?p=4312#comment-19686 "The author might need an economist some day," What services would an economist provide for an individual? I'm trying to come up with a plausible scenario, and blanking... “The author might need an economist some day,”

What services would an economist provide for an individual? I’m trying to come up with a plausible scenario, and blanking…

]]> By: Ken http://baselinescenario.com/2009/07/09/the-limits-of-economics/#comment-19685 Ken Fri, 10 Jul 2009 22:13:54 +0000 http://baselinescenario.com/?p=4312#comment-19685 "On some level, don’t you suspect that a lot of male politicians do it because they want to impress women, and that affairs are part of the payoff of politics?" Affairs, baseball tickets, free renovations on the house, steak dinners, golf games, drugs... Every time a scandal breaks, I get more depressed - not because the politicians are human (I don't expect better) but because the scale of bribes is so petty. I want a better class of crook! “On some level, don’t you suspect that a lot of male politicians do it because they want to impress women, and that affairs are part of the payoff of politics?”

Affairs, baseball tickets, free renovations on the house, steak dinners, golf games, drugs… Every time a scandal breaks, I get more depressed – not because the politicians are human (I don’t expect better) but because the scale of bribes is so petty. I want a better class of crook!

]]> By: mort_fin http://baselinescenario.com/2009/07/09/the-limits-of-economics/#comment-19649 mort_fin Fri, 10 Jul 2009 16:47:23 +0000 http://baselinescenario.com/?p=4312#comment-19649 There are substantial benefits to writing a blog post that simultaneously disses economics and discusses the salacious topic of adultery. An increase in readership, fame, notoriety, etc. Of course, there are also costs. The author might need an economist some day, who will be hacked off if the particular blog post is remembered. Let epsilon denote a decay factor for blog post memory, gamma sub t is the (time varying) probability that a post will be remembered (gamma may be a function of more than time and epsilon) ... There are substantial benefits to writing a blog post that simultaneously disses economics and discusses the salacious topic of adultery. An increase in readership, fame, notoriety, etc.

Of course, there are also costs. The author might need an economist some day, who will be hacked off if the particular blog post is remembered.

Let epsilon denote a decay factor for blog post memory,
gamma sub t is the (time varying) probability that a post will be remembered (gamma may be a function of more than time and epsilon)
…

]]> By: CB http://baselinescenario.com/2009/07/09/the-limits-of-economics/#comment-19644 CB Fri, 10 Jul 2009 15:22:23 +0000 http://baselinescenario.com/?p=4312#comment-19644 Human behavior is so filled with irrationality that it's amazing to me that we call ourselves the rational animal. Take "housing prices will always go up" as a start. Human behavior is so filled with irrationality that it’s amazing to me that we call ourselves the rational animal. Take “housing prices will always go up” as a start.

]]> By: System of the World http://baselinescenario.com/2009/07/09/the-limits-of-economics/#comment-19636 System of the World Fri, 10 Jul 2009 15:02:29 +0000 http://baselinescenario.com/?p=4312#comment-19636 "The profession of politics would be altogether too disagreeable without compensation above and beyond what is strictly appropriate." “The profession of politics would be altogether too disagreeable without compensation above and beyond what is strictly appropriate.”

]]> By: J D http://baselinescenario.com/2009/07/09/the-limits-of-economics/#comment-19607 J D Fri, 10 Jul 2009 06:54:19 +0000 http://baselinescenario.com/?p=4312#comment-19607 I was thinking about this just this morning. I like to think of it as the "Freakonomics effect." I was thinking about this just this morning. I like to think of it as the “Freakonomics effect.”

]]> By: Ted K http://baselinescenario.com/2009/07/09/the-limits-of-economics/#comment-19606 Ted K Fri, 10 Jul 2009 05:43:07 +0000 http://baselinescenario.com/?p=4312#comment-19606 I think Mr. Kwak makes a good point in that we have pretty much gone past the limits of what economics models can do or predict. I think even the people at Planet Money knew that before they did the piece, but adultery/sex stories are a good way to attract/keep listeners. It's not a legitimate news story and NPR knows that. It's a way to push people's buttons. As far as Sanford is concerned, I think it's been a marriage of convenience for YEARS. She provides him with campaign finances, and he gives her access to the system and the elite people of Charlotte. They both get what they bargained for. My guess is, similar to Bill and Hillary Clinton they've agreed a long time ago that as long as he doesn't embarrass her PUBLICLY he can play all he wants. And really did you see Mrs. Sanford on TV??? My guess is her fun box is a few degrees more frigid than Hillary's. And if we think of 2004 other politicians with a nice smile and a spouse from a wealthy family might come to mind...... It gets down to the fact that sex is a strong strong physical desire for men (women I don't pretend to understand). If that desire is unquenched things will happen. You can't make a model for foxes telling them how risky it is to steal eggs from the hen house. I think Mr. Kwak makes a good point in that we have pretty much gone past the limits of what economics models can do or predict. I think even the people at Planet Money knew that before they did the piece, but adultery/sex stories are a good way to attract/keep listeners. It’s not a legitimate news story and NPR knows that. It’s a way to push people’s buttons.

As far as Sanford is concerned, I think it’s been a marriage of convenience for YEARS. She provides him with campaign finances, and he gives her access to the system and the elite people of Charlotte. They both get what they bargained for. My guess is, similar to Bill and Hillary Clinton they’ve agreed a long time ago that as long as he doesn’t embarrass her PUBLICLY he can play all he wants. And really did you see Mrs. Sanford on TV??? My guess is her fun box is a few degrees more frigid than Hillary’s. And if we think of 2004 other politicians with a nice smile and a spouse from a wealthy family might come to mind……

It gets down to the fact that sex is a strong strong physical desire for men (women I don’t pretend to understand). If that desire is unquenched things will happen. You can’t make a model for foxes telling them how risky it is to steal eggs from the hen house.

]]> By: Tao Jones http://baselinescenario.com/2009/07/09/the-limits-of-economics/#comment-19604 Tao Jones Fri, 10 Jul 2009 05:17:58 +0000 http://baselinescenario.com/?p=4312#comment-19604 James, You inadvertently point out the limitations of modern economics, which is premised upon the mistaken conviction that all "economic" decisions are based solely on considerations of wealth. That's a fiction that has been fostered by the Austrian and Chicago Schools of economics in order to kill the "communistic fiction" of the "invisible hand" metaphor, but it is a fiction. My view of Sanford is that he hates his marriage to the Skil heiress, and he wants to get as far away from her as possible believing that he can lead a good and righteous life without her. I don't think there is anything "irrational" about it because happiness is more than just being famous and rich. The guy has enough clout and skill to be comfortable, particularly in a third world latin country. So, he continues to make embarassing revelations, but embarassing to whom? Not him. He does not care. All of his revelations are aimed right at her. Power dynamics are interesting, James. You know that, or should. James,

You inadvertently point out the limitations of modern economics, which is premised upon the mistaken conviction that all “economic” decisions are based solely on considerations of wealth. That’s a fiction that has been fostered by the Austrian and Chicago Schools of economics in order to kill the “communistic fiction” of the “invisible hand” metaphor, but it is a fiction.

My view of Sanford is that he hates his marriage to the Skil heiress, and he wants to get as far away from her as possible believing that he can lead a good and righteous life without her. I don’t think there is anything “irrational” about it because happiness is more than just being famous and rich. The guy has enough clout and skill to be comfortable, particularly in a third world latin country. So, he continues to make embarassing revelations, but embarassing to whom? Not him. He does not care. All of his revelations are aimed right at her.

Power dynamics are interesting, James. You know that, or should.

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